Shabbar Zaidi voice against reversing zero rating for Pakistan exports

Former Chairman Federal Board of Revenue, Syed Shabbar Zaidi has voiced against reversing the zero-rating for Pakistan exports, saying that reversing it will be ‘regressive.’

In a tweet post on Wednesday, the former FBR Chairman stated: “I fought and won the war for the abolition of zero-rating for export sector.”

“If this is done then we should forget about any tax system in Pakistan,” said Zaidi, while calling for an improvement in the refund system. “In this age of technology this will be absurd,” he said.

Earlier, Business Recorder reported that Prime Minister’s Advisor on Commerce and Investment, Abdul Razak Dawood, is reportedly seeking zero-rating for the entire textile chain in the Textile and Apparel Policy 2020-25 to be considered by the ECC.

"Tariff structure of entire textile and apparel chain including MMF and cotton based value-chains will be rationalized on priority followed by accessories and dyes and chemicals," the sources added.

Meanwhile, the All Pakistan Textile Mills Association (APTMA) in a series of tweets on Wednesday, said that the withdrawal of zero-rating was one of the most regressive policies brought in by then FBR Chairman Shabbar Zaidi.

APTMA, while sharing a snapshot of FBR circular, said that FBR acknowledged that its FASTER system was riddled with problems and was not refunding claims. “Abolition of zero-rating brought exporters to their knees, seeking the return of their own money,” said APTMA.

The APTMA added that tax on domestic sale of finished goods must be collected from domestic consumers while keeping TVC zero-rated. “Withdrawal of zero-rating has led to over Rs 250 billion stuck liquidity. That would have proved invaluable in expansion and modernization of the industry,” it said.